• Inflation should remain in-line with price stability
  • Inflation expectations firmly anchored
  • Economic weakness in EZ expected to extend into next year
  • Should recover in 2013
  • Main refinancing operations (MRO) at full allotment on fixed rates until at least July(Unlimited borrowing for banks)
  • Indicators point toward further weakness in Q4 though some have stabilized
  • Gradual recovery later in 2013
  • Cuts GDP forecasts
  • ECB forecasts GDP to contract between 0.4 and 0.6% this year
  • Sees GDP between +0.3% and -0.9% next year; Was at -0.4% and +1.4%
  • Price stability risks broadly balanced
  • 2013 inflation forecast 1.1% to 2.1%
  • Loan demand weakness due to weak GDP outlook, risk aversion balance sheet adjustment